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Business Standard
3 days ago
- Business
- Business Standard
India-China electronics firms turn to tech tie-ups as JV rules delay deals
Talks between Voltas and China's Highly Group have failed to revive their previously scrapped joint venture (JV) for setting up a compressor plant in India. The Chinese firm has now offered a technical partnership in light of continued political tensions and regulatory bottlenecks, according to a report by The Economic Times. A Voltas team reportedly visited China in late May to reopen talks, but Highly Group declined to pursue an equity partnership, citing delayed government approvals and geopolitical tensions. Instead, it offered a technology-sharing arrangement, an option it had previously rejected two years ago. Firms explore non-equity deals under electronics manufacturing scheme The development comes even as Indian firms ramp up efforts to secure partnerships under India's ₹23,000-crore electronics component manufacturing scheme, aimed at reducing import dependence and boosting local production. Efforts to secure Chinese equity investment continue to face hurdles under existing policy restrictions, such as Press Note 3, which requires multi-agency clearance for investments originating from neighbouring countries. However, companies on both sides appear more receptive to low-equity or non-equity collaborations. Regulatory constraints on Chinese investment were introduced in 2020 following border clashes with Chinese troops. Despite this, industry leaders maintain that Chinese technology remains critical for building a globally competitive electronics manufacturing ecosystem in India. Tech partnerships already forming Industry executives say Indian firms are now prioritising access to Chinese technology over capital. Some partnerships even limit Chinese equity to 20–30 per cent, or exclude it entirely, the report said. One such technical partnership has already materialised. Highly has already signed a technical deal with PG Electroplast to manufacture air conditioners. PG Electroplast also plans to invest ₹350 crore in a compressor plant near Pune with a five-million-unit annual capacity.
Time of India
3 days ago
- Business
- Time of India
India, China companies explore technical tie-ups as as govt plans to ramp up electronics parts making capacity
Voltas' recent attempt to revive its joint venture talks with China's Highly Group for a compressor plant in India fell through, with the Chinese company instead offering a technical alliance. Highly cited prolonged Indian government approvals and ongoing geopolitical tensions as risks to an equity partnership. This marks a shift from two years ago, when Highly had rejected a similar tech-only tie-up with Voltas. Tired of too many ads? Remove Ads 'China's Tech Expertise' Tired of too many ads? Remove Ads Popular in Cons. Products 1. AC makers lower sales projection to 10-15% for 2025 despite spike in June numbers Tired of too many ads? Remove Ads When a team from Tata Group-owned air-conditioner maker Voltas visited China in late May to revive talks with Highly Group for a joint venture compressor plant in India , the Chinese major declined, and instead proposed a technical cited prolonged government approvals and geopolitical tensions as major risk factors to an equity partnership in tighter government scrutiny, several Indian firms are exploring Chinese partnerships under the upcoming ₹23,000-crore electronics component manufacturing scheme, and Chinese firms are now much more open to technical tie-ups and minority joint ventures than had rejected a similar technological collaboration proposal from Voltas two years ago.'The economic truth is we have to partner with the Chinese companies for the upcoming component scheme,' the chief executive of one of the largest electronics contract manufacturers in the country told ET on the condition of anonymity. 'While we don't need their capital as much as their technology, they, too, understand the changed geopolitical scenario, and are open to either holding a minority 20-30% equity in joint ventures or just a technical alliance.'Homegrown electronics contract manufacturers such as Dixon Technologies PG Electroplast , Epack Durable and Bhagwati Products are in talks with multiple Chinese companies to apply for the component scheme.A leading contract manufacturer said some Chinese firms have agreed to non-equity Group has already finalised a technical alliance with Noida-based contract manufacturer PG Electroplast to manufacture air-conditioner compressors, people cited above Chinese firm is open to more such deals where it will have an assured quantity of production in exchange for its technology, they and Voltas were forced to scrap a joint venture agreement in which the Chinese partner was to hold 60% two years ago. The proposal did not receive the government's Press Note 3 approval. At that time, Highly was not comfortable with just a tech tie-up.A Voltas spokesperson told ET the company undertakes regular visits to key supplier partners including Highly to strengthen technical collaboration and assess future opportunities.'While a range of strategic topics are periodically discussed as part of these engagements, there are no firm developments or commitments at this stage with respect to a joint venture or equity participation,' she Group and PG Electroplast did not Electroplast in a recent earnings call said it is setting up a compressor plant with a capacity of 5 million units per year near Pune for ₹350 has a joint venture proposal with HKC Corp for display modules currently awaiting Press Note 3 clearance. The Noida-based electronics manufacturing services firm will soon file another proposal for a JV with Vivo, the company management said in its latest earnings is also looking to attract over ₹59,000 crore of investments through the electronics component manufacturing scheme to promote domestic production and integrate Indian electronics companies into global value accounts for 70-75% of all electronics components imports into India. The rest comes mainly from Taiwan, Thailand, Vietnam, South Korea and Japan. Industry executives said components coming from Taiwan, Thailand and Vietnam are also mostly made by Chinese 2020, India turned cold to Beijing after military clashes, and issued Press Note 3 norms that require multi-department approvals for investments from businesses and entrepreneurs based in bordering countries such as Indo-Sino equations have further changed after India's 'Operation Sindoor' strike against Pakistan last month when Pakistan used Chinese artillery in the border clashes and claimed China was its 'all-weather strategic cooperative partner and ironclad friend'.
